Telefonica pursuing consolidation in Mexico

Telefonica has stated that it is considering mergers and acquisitions in Mexico to strengthen its position against market leader America Movil.

Noting that mergers were not the only option, COO Jose Maria Alvarez-Pallete said: “We are very open-minded to consolidation in Mexico.” This could extend to network sharing as well as roaming agreements, he confirmed.

Movistar, Telefonica’s Mexican subsidiary, is the second-largest operator in the market with around 19 million connections. However, this places it substantially behind America Movil subsidiary Telcel’s 72.5 million.

Telefonica surpassed its Q3 debt-reduction target, allowing it to pursue consolidation in Mexico more assiduously. It is believed to be in talks with operator Iusacell, which is part-owned by Mexican broadcaster Grupo Televisa.

Mexico’s government will likely welcome the news that Telefonica is launching a more direct challenge to America Movil’s dominance. Recent legislation that targets companies with an excessive market share has been ratified.

 

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